Switching to HF Now

Hey all, wanted to get your thoughts on career switching to a HF in this current environment and see what the general consensus is in terms of likelihood / career outlook.

I went to a semi-target, started in MM IB, did a PE stint, and came back to IB at a Jeff / Gugg / GHL tier bank in a good group. 

I know my profile doesn't bode well for the top tier funds out there, but was wondering if anyone can give a sense for if this background will be received positively at smaller funds - thinking mostly L/S, but maybe activist as well given my previous PE experience. 

Just trying to get a sense before dedicating too much time / resources to job hunting. 

Comments (4)

  • Investment Analyst in HF - EquityHedge
Sep 27, 2022 - 11:47am

Environment is great - rich opportunity set for both L/S. Much better than last year

For L/O I would be more cautious as there can be more downside IMO

Most Helpful
Sep 28, 2022 - 2:53pm
thesteezeman, what's your opinion? Comment below:

I actually think your background would recruit better at a larger MM.  Those funds always have seats to fill and their investment style (a lot of quarter calling and trading) requires more of a brute force work ethic that you certainly developed in IB / PE.  Smaller SM's have a longer time horizon and generally place less emphasis on intensely grinding out models and data pulls and more on the way you think critically.  Not always the case by any means, but I know smaller SM shops that don't even look at former PE candidates because they want people who have a bit more flexibility in their investing mindset (as is required by the public markets).  

I think your background would get the most pushback on the following:

  • Passion: HF workflow is way less structured than IB/PE.  It is on you to monitor newsflow, conduct research thoughtfully and scan for new ideas.  You have to be genuinely curious about the work to do well, and a background without public market investing will prompt these funds to question if you're really into it.  I'd make sure you have several stocks ready to pitch and discuss extensively (long and short) as well as general knowledge about important news and the markets.  Being fluent in these conversations will be key.
  • Are you able to handle the irrationality?  Obviously, the public markets are chaotic and behaving steadily in periods of huge losses and angry investors is something that not everyone can do.  This is a type of stress that is different from the fire drill grinds of IB, HF's will be curious about how you would act with the longer periods of omnipresent pressure.  Definitely be prepared to talk about times where you overcame adversity or times where you were wrong and had to admit it. 
  • Can you think independently?  Going through the process of good grades at a target to recruiting well into IB and recruiting well into PE generates a lot of people with similar backgrounds and similar mindsets.  HF's value diverse backgrounds and want new perspectives.  Be prepared to talk about opinions that you have that differ from the masses, ideally with some sort of unique insight or data points to back it up.

I'm clearly biased but I think now is a great time to get into the HF space.  The times of 0 interest rates and BS companies' stocks constantly grinding higher and getting funding are over.  Active management will be desired in times of weak S&P500 returns.  As a sign of the times, I'm starting to hear more about people who traditionally own equities shifting money into bonds for the long haul.

Sep 28, 2022 - 5:21pm
username85639, what's your opinion? Comment below:

Accusantium amet dignissimos doloremque voluptatem. In odit est temporibus repellendus quis enim. Quo totam aperiam cupiditate fugit est quidem. Nisi porro doloribus est assumenda necessitatibus.

Doloribus id quaerat id iusto aut ut odio. Cupiditate corrupti quo est eum nobis neque. At dolores quis rerum dignissimos sed fugiat. Excepturi nam aut reiciendis sequi eos.

Start Discussion

Career Advancement Opportunities

November 2022 Hedge Fund

  • Point72 98.9%
  • D.E. Shaw 97.9%
  • AQR Capital Management 96.8%
  • Citadel Investment Group 95.8%
  • Two Sigma Investments 94.7%

Overall Employee Satisfaction

November 2022 Hedge Fund

  • D.E. Shaw 98.9%
  • Magnetar Capital 97.8%
  • Blackstone Group 96.8%
  • Citadel Investment Group 95.7%
  • Millennium Partners 94.6%

Professional Growth Opportunities

November 2022 Hedge Fund

  • D.E. Shaw 99.0%
  • Point72 97.9%
  • AQR Capital Management 96.9%
  • Citadel Investment Group 95.8%
  • Blackstone Group 94.8%

Total Avg Compensation

November 2022 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (22) $464
  • Director/MD (11) $434
  • NA (5) $306
  • Manager (4) $282
  • 3rd+ Year Associate (23) $275
  • Engineer/Quant (63) $269
  • 2nd Year Associate (29) $251
  • 1st Year Associate (71) $192
  • Analysts (213) $178
  • Intern/Summer Associate (20) $130
  • Junior Trader (5) $102
  • Intern/Summer Analyst (236) $85